The parents of a 20-year-old man who committed suicide after mistakenly believing he owed Robinhood $ 730,000, plan to file a wrongful death lawsuit against the stock trading application, according to a report.
University of Nebraska student Alexander Kearns, who became interested in commerce, ran into trouble on June 11, when the app suspended his account, showing that he had $ 730,000 in the red and needed to pay more than $ 170,000 to us. next few days, CBS News report.
“He thought he blew his life up,” Alex’s father, Dan Kearns, said in an interview with the network. “He thought he blew it apart from the repair.”
Kearns was trading options instead of stocks, so the negative balance was probably a temporary amount that would show up until the options settled in his account.
There was no customer service number for Kearns to call, and although he sent Robinhood an email three times, he only received an automatic response that the app would return to him when he could, noting a possible delay in responses, said the report.
The next day, on June 12, Kearns killed himself by stepping in front of an approaching train.
He left a suicide note that said, “How did a 20-year-old without income manage to get almost a million dollars in leverage?”
Kearns’s mother, Dorothy Kearns, told the outlet that she “lost the love of my life”.
“I can’t tell you how incredibly painful it is. It’s the kind of pain that I don’t think should be humanly possible for a father to overcome, ”said the disturbed mother.
Ironically, the app went back to the amateur broker the day after the suicide, saying, “Great news! We are contacting you to confirm that you answered your margin call and we have lifted your business restrictions. ”According to the report.
Dan said the app must have stronger checks to assess the trader’s experience.
“How are those guardrails? How does that – how does it prevent an 18 year old from doing risky business that he really doesn’t understand? ”Dan told CBS referring to a screening question that allows someone to negotiate even if he answers that he doesn’t have much experience.
In the lawsuit due to open on Monday, parents said Robinhood “should be held responsible,” according to the news site.
“The information they gave him was incredibly distorted and possibly completely wrong,” said Benjamin Blakeman, the Kearns family lawyer.
“Because they make it look like you owe $ 730,000 when you don’t really owe anything,” Blakeman told the channel. “It can cause panic to anyone.”
Another family lawyer, Ethan Brown, told CBS, “they do not provide any mechanism through a phone call, via a live email service, to get live answers to questions.”
The Kearns said their son just wanted answers and help, the report said.
Robinhood told CBS about the changes they have made since Kearns’s devastating death, including adding instructions and educational materials for options trading and adding screening for riskier trading experience.
They also now have a live agent callback option and a mechanism to escalate emails like the one Kearns sent, the media reported.
“We remain committed to making Robinhood a place to learn and invest responsibly. Our mission is to democratize finance for all, ”an application spokesman told CBS.
“We designed Robinhood to prioritize mobility and be intuitive, with the aim of making the investment more familiar and less scary for a whole generation of people who previously did not work in the financial system”, the statement continues.
Robinhood was recently attacked when it prevented people from buying GameStop stock and other stocks that exploded in a market frenzy last month.